Brazil's Santos port privatization moves on

The privatization of Brazil's Santos Port Authority (SPA), the federal state-run company that operates Latin America's biggest port, has moved an important step forward by receiving the nod from the technical area of audit court TCU.

A report by TCU's technical team found no major issues with the plan, which was then sent to the rapporteur of the case at the court, Bruno Dantas.

The only step left in the process is the notice’s approval by the TCU.

The 35-year contract involves expected investments of 25bn reais (US$4.80bn) in the port in São Paulo state, around 20bn reais of which will be related to operations.

The concession will include the construction of an underwater tunnel to connect the cities of Santos and Guarujá and a leasing contract for a new container terminal called STS10.

According to local paper Valor Econômico, Dantas plans to call a TCU board vote for next week. 

However, due to the sensitivity of the issue and the government transition, it is expected that one of the board members will make a "request for examination" during the session, halting the process. The goal is to let the new government decide on the future of SPA.

The team of president-elect Luiz Inácio Lula da Silva, who takes office on January 1, has said the privatization of the port authority is not in its plans.

Lula's Workers Party prefers a model in which SPA would be listed on the stock market but with control being retained by the government. 

The incoming government would also opt for the concession of specific services (such as dredging) and performance targets set by the board.